WORLD INVESTOR WEEK
This week we are celebrating World investor week so we have mentioned below a chat with one of our investors relating to his queries on market volatility & his portfolio.
Investor : Market ka kya haal hai ?
Advisor : Since last few days Equity markets are currently in a downward trend, because of various reasons, including valuations, US-China trade war, surging oil prices and weakening fiscal position, leading to weaker rupee…
Debt market is also getting impacted because of weakening fiscal condition, few defaults and lack of liquidity in the corporate bond market.
But in long term, Equity markets are a good asset class, by nature their movement has always been zigzag but trending upwards…
Investor : That is fine, but my portfolio is down more then 15% in the last 10 months , what should I do?
Advisor : Historically, Equity & Real Estate, have been the major wealth creators, all over the world.
Equity markets are always good in long term…but the bane is unlike real estate, the prices are reflected almost live or everyday and in the current times with too much of media attention…it takes a bit of an effort to do long term investing..
Investor : But as an Advisor you should have known that markets could fall…
Advisor : By nature at Arthashastra we have always been cautious and thus we have at all times recommended staggered way of investing thru SIP or STP route…thus absorb the volatility..
But frankly it is impossible to judge the market movement in short term, markets behave irrationally both while going up or down…
Instead We at Arthashastra focus on helping our investors plan their investments in alignment to their goals with a right asset allocation, rather than time the markets. Peter Lynch, the legendary Fund Manager says, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, then has been lost in the corrections themselves.”
Investor : So, shall we invest more in these times when our portfolio is down…
Advisor : You can, but do not regret if our portfolio, goes further down from here…as I said , we cannot predict the market movement & investing at the lowest point is a matter of luck not research or analysis. We strongly believe that having a disciplined asset allocation is the key to generate portfolio returns and thus the asset allocation based on your goals should be the guiding force behind your decisions…
Investor : So, what is the bottom line..
Advisor : Keep Investing as per your goals, Stop predicting the market, do not look at your portfolio more than twice a year, liquidate when your goals arise and invest more when you have more or bigger goals else stick to your systematic investments, stop following the market news. The most important thing is enjoy your life…& remember the objective should be – we earn money to spend good time and not spend good time to earn money!